Kreutzer v. Illinois Commerce Commission

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State: Illinois

Court: 2nd District Appellate

Docket No: 2-09-0007 Rel

Case Date: 09/16/2010

Preview:No. 2-09-0007 Filed: 9-16-10 ______________________________________________________________________________ IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT _______________________________________________________________________________ FRANCES KREUTZER, MARIE CARANCI, ) On Petition for Administrative Review WILLIAM BYRNE, and LINDA BYRNE, ) from the Illinois Commerce Commission. ) Petitioners, ) ) v. ) ICC Case No. 07--0310 ) ILLINOIS COMMERCE COMMISSION, ) COMMONWEALTH EDISON ) COMPANY, THE VILLAGE OF HUNTLEY, ) EXELON BUSINESS SERVICES ) COMPANY, NEUMANN HOMES, INC., ) INDYMAC BANK, F.S.B., HOWARD ) E. REID, and THE VILLAGE OF GILBERTS, ) ) Respondents. ) ______________________________________________________________________________ JUSTICE O'MALLEY delivered the opinion of the court: Petitioners, Frances Kreutzer, Marie Caranci, William Byrne, and Linda Byrne, appeal from the order of the Illinois Commerce Commission (Commission) granting a certificate of public convenience and necessity to respondent Commonwealth Edison Co. (ComEd) for the construction of a new electrical transmission line in McHenry and Kane Counties. The line the Commission authorized ComEd to construct would cross petitioners' property. We agree with petitioners that the evidence before the Commission does not demonstrate the need for the amount of petitioner's property that the Commission's order authorized ComEd to seek though condemnation. We therefore reverse and remand.

No. 2--09--0007

ANALYSIS I. Motion to Dismiss the Appeal On February 20, 2009, the Commission moved this court to dismiss this appeal for lack of jurisdiction. We denied the motion on March 13, 2009. The Commission renews the motion, arguing that it was not given timely notice of petitioners' petition for review in this court. The Commission points to section 10--201 of the Public Utilities Act (Act) (220 ILCS 5/10--201 (West 2008)). Section 10--201(a) states: "(a) Jurisdiction. Within 35 days from the date that a copy of the order or decision sought to be reviewed was served upon the party affected by any order or decision of the Commission refusing an application for a rehearing of any rule, regulation, order or decision of the Commission, including any order granting or denying interim rate relief, or within 35 days from the date that a copy of the order or decision sought to be reviewed was served upon the party affected by any final order or decision of the Commission upon and after a rehearing of any rule, regulation, order or decision of the Commission, including any order granting or denying interim rate relief, any person or corporation affected by such rule, regulation, order or decision, may appeal to the appellate court of the judicial district in which the subject matter of the hearing is situated, or if the subject matter of the hearing is situated in more than one district, then of any one of such districts, for the purpose of having the reasonableness or lawfulness of the rule, regulation, order or decision inquired into and determined." 220 ILCS 5/10--201(a) (West 2008). The specific procedures for perfecting an appeal are set forth in section 10--201(b), which states: "(b) Pleadings and Record. No proceeding to contest any rule, regulation, decision

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or order which the Commission is authorized to issue without a hearing and has so issued shall be brought in any court unless application shall have been first made to the Commission for a hearing thereon and until after such application has been acted upon by the Commission, nor shall any person or corporation in any court urge or rely upon any grounds not set forth in such application for a hearing before the Commission, but the Commission shall decide the questions presented by the application with all possible expedition consistent with the duties of the Commission. The party taking such an appeal shall file with the Commission written notice of the appeal. The Commission, upon the filing of such notice of appeal, shall, within 5 days thereafter, file with the clerk of the appellate court to which such appeal is taken a certified copy of the order appealed from and within 20 days thereafter the party appealing shall furnish to the Commission either a copy of the transcript of the evidence, including exhibits, or enter into a stipulation that only certain questions are involved, which transcript or stipulation is to be included in the record provided for in Section 10--110 [(220 ILCS 5/10--110 (West 2008))]. The Commission shall certify the record and file the same with the clerk of the appellate court to which such appeal is taken within 15 days of being furnished the transcript or stipulation. The party serving such notice of appeal shall, within 5 days after the service of such notice upon the Commission, file a copy of the notice, with proof of service, with the clerk of the court to which such appeal is taken, and thereupon the appellate court shall have jurisdiction over the appeal. The appeal shall be heard according to the rules governing other civil cases, so far as the same are applicable." (Emphases added.) 220 ILCS 5/10--201(b) (West 2008). Finally, section 10--201(c) provides:

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(c) No appellate court shall permit a party affected by any rule, regulation, order or decision of the Commission to intervene or become a party plaintiff or appellant in such court who has not taken an appeal from such rule, regulation, order or decision in the manner as herein provided." (Emphasis added.) 220 ILCS 5/10--201(c) (West 2008). The Commission construes section 10--201 to require the party appealing a Commission decision to notify the Commission of the appeal within 35 days of the Commission's final order. The Commission sees the notification requirement as a jurisdictional prerequisite. The Commission argues that we lack jurisdiction here because the Commission issued its decision denying rehearing on December 1, 2008, but petitioners did not properly provide the Commission notice of their January 2, 2009, appeal to this court until March 2, 2009. The Commission misreads section 10--201. The section does not require simple notification of an appeal initiated elsewhere, i.e., in the appellate court; rather, it requires that the appeal be initiated with the Commission before jurisdiction will vest in the appellate court. In Consumers Gas Co. v. Illinois Commerce Comm'n, 144 Ill. App. 3d 229 (1986), the Fifth District Appellate Court noted a conflict between section 10--201 and Supreme Court Rule 335 (155 Ill. 2d R. 335). Rule 335 establishes "[t]he procedure for a statutory direct review of orders of an administrative agency by the Appellate Court" (155 Ill. 2d R. 335) and mandates the filing in the appellate court of a "petition for review" (155 Ill. 2d R. 335(a)), which in administrative review cases serves the function of the notice of appeal required in other civil cases (People ex rel. Madigan v. Illinois Commerce Comm'n, 231 Ill. 2d 370, 388 (2008)). Rule 335(a) incorporates the timing requirements of Supreme Court Rule 303(a)(1) (Official Reports Advance Sheet No. 8 (April 11, 2007), R. 303(a)(1), eff. May 1, 2007) for the filing of a notice of appeal. 155 Ill. 2d R. 335(i)(1); County of Cook, Cermak Health

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Services v. Illinois State Local Labor Relations Board, 144 Ill. 2d 326, 329-30 (1991) (hereafter Cermak) ("Rule 335 incorporates the 30-day filing period established by Rule 303(a)"). Rule 335(b) also provides that the petitioner "shall serve the petition for review on the agency and on all other parties of record to the proceedings before the agency in the manner prescribed for serving and proving service of a notice of appeal in Rule 303(c)." 155 Ill. 2d 335(b). The Consumers Gas court found section 10--201 in "direct contravention" of Rule 335: "Paragraph (a) of [Rule 335] requires that a petition for review shall be filed with the appellate court, unlike section 10--201(b) which requires that a notice of appeal shall be filed with [the Commission]. Paragraph (b) of the rule requires that the petitioner seeking appellate review serve a copy of the petition for review on the administrative agency and all other parties of record. In contrast, under section 10--201(b) it is the clerk of the appellate court who is served with a copy of the notice of appeal which was filed with the Commission in the first instance." (Emphasis added.) Consumers Gas, 144 Ill. App. 3d at 235. The Consumers Gas court struck the jurisdictional provisions of section 10--201 as unconstitutional because they were an "improper legislative intrusion into the area of appellate practice by attempting to regulate the method for perfecting a direct appeal of an administrative decision." Consumers Gas, 144 Ill. App. 3d at 236. In Cermak, the supreme court held that, in appeals from orders of the Illinois Local Labor Relations Board, Rule 335, rather than section 3--103 of the Administrative Review Law (Ill. Rev. Stat. 1987, ch. 110, par. 3--103), governs the time for filing an appeal. Cermak, 144 Ill. 2d 326. In reaching that conclusion, the court noted that "[t]he specific purpose for adoption of Rule 335 was to govern direct appeals to the appellate court from orders of administrative agencies." Cermak, 144 Ill. 2d at 335. The supreme court cited with approval Consumer Gas's holding (as the

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supreme court summarized it) that section 10--201 is "an improper legislative intrusion into the judiciary's constitutional power over appellate procedure and practice." Cermak, 144 Ill. 2d at 338. It is not in our power to depart from Cermak. The Commission insists that "timeliness in notifying the Commission was not considered" in Consumers Gas. We agree, but the reason Consumers Gas did not concern "timeliness in notifying the Commission" of an appeal filed elsewhere is that section 10--201 requires filing the appeal with the Commission in the first instance. According to Consumers Gas, while section 10--201(b) requires initial filing of the appeal in the Commission with notice to the appellate court, Rule 335, by contrast, requires initial filing of the appeal in the appellate court with notice to the Commission. The Commission's only argument in support of dismissal is that it did not receive proper notice under section 10--201(b). (The Commission says: "The jurisdictional issue being raised *** is the timely notification of [petitioners'] appeal.") Contrary to the Commission's position, section 10--201(b) does not require that the Commission be given notice of an appeal filed elsewhere but, rather, that the appeal be initiated with the Commission. Hence the Commission's argument is a nonstarter. In any case, jurisdiction was vested here simply by the filing in this court of petitioners'; petition for review as required by Rule 335. "[N]o step other than the timely filing of a notice of appeal is jurisdictional" where the petitioner seeks direct review by the appellate court of a Commission decision. Moncada v. Illinois Commerce Comm'n, 212 Ill. App. 3d 1046, 1051 (1991). We again deny the Commission's motion to dismiss this appeal, and we turn to the merits. II. The Certificate of Public Convenience and Necessity

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In an initial petition filed May 15, 2007, and an amendment filed August 14, 2007 (petition), ComEd requested from the Commission a certificate of public convenience and necessity. ComEd sought authorization to construct, operate, and maintain a new 138-kilovolt (kV) transmission line in Kane and McHenry Counties. ComEd gave the following informal description of the route for the proposed line, known as the Kreutzer Road route: "The proposed line will begin at ComEd's existing Gilberts substation, located south of Interstate 90 near Randall Road. It will exit the substation to the northwest, following the south side of Interstate 90 for about six miles to a new substation, to be known as the Sandwald substation. From a point on the south side of Interstate 90 ***, the line will also run north, cross the tollway, and continue north following property lines to the north side of Freeman Road. It will then run west along Freeman Road, and continue north along Smith Drive, continue east along a rail spur corridor, and then southeast along the Union Pacific Railway to Kreutzer Road. East of the railroad tracks, the line will parallel Kreutzer Road south of the roadway, continuing east across Huntley-Dundee Road to connect with ComEd's existing transmission line." ComEd described the need for the line: "The purpose of the proposed line is to provide capacity to portions of Kane and McHenry Counties, Illinois, where electrical load has been increasing and is expected to continue to increase. This project is the third phase of an overall strategy to provide adequate and reliable electrical energy to this rapidly growing area. The first two phases were approved by the [Commission] in Docket No. 96--0410 and have been put into service already. By completing the loop of substations that includes Gilberts, proposed Sandwald,

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Algonquin, and North Huntley, each of the substations in the area will be fed by two independent two-circuit lines, maintaining and enhancing reliability. The line is also necessary to power a new substation to serve the area, which ComEd will call the Sandwald Substation. Absent reinforcement, a number of existing transformers and 34 kV lines in this area would experience overloads as early as 2009. The proposed project will prevent each of these overloads by transferring the load in this area from the existing 34 kV system to the proposed transmission line. The construction of the proposed line is necessary to continue to provide adequate, reliable[,] and efficient service to these cities as well as the surrounding area." Exhibit B to ComEd's petition was a legal description of the Kreutzer Road route. It stated in pertinent part: "ONE PROPOSED DOUBLE CIRCUIT 138KV TRANSMISSION LINE TO BE LOCATED IN THE COUNTIES OF KANE AND MCHENRY IN ILLINOIS: SAID TRANSMISSION LINE TO BEGIN AT COMED'S EXISTING GILBERTS SUBSTATION LOCATED ON THE SOUTH SIDE OF I90 IN SECTION 30, TOWNSHIP 42 NORTH, RANGE 8 EAST OF THE THIRD PRINCIPAL MERIDIAN IN KANE COUNTY, ILLINOIS ***. AT A POINT ON THE *** ROUTE (SAID POINT BEING APPROXIMATELY 1/2 MILE EAST OF THE I90 and ROUTE 47 INTERSECTION), THE PROPOSED TRANSMISSION LINE WILL EXTEND NORTHERNLY ALONG THE CENTERLINE OF SECTION 16, TOWNSHIP 42 NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN IN KANE COUNTY APPROXIMATELY 2,877.8 FEET TO FREEMAN

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ROAD; *** THENCE EASTERLY ALONG KREUTZER ROAD APPROXIMATELY 6,433.0 FEET TO THE INTERSECTION OF KREUTZER ROAD AND HUNTLEY ROAD LOCATED SECTION 2, TOWNSHIP 42 NORTH, RANGE 7 EAST OF THE THIRD PRINCIPAL MERIDIAN IN KANE COUNTY ***." (Emphasis added.) At issue in this appeal is the portion of the Kreutzer Road route that tracks Kreutzer Road, along which petitioners own property. Petitioners were allowed to intervene in the action before the Commission. In a formal position statement filed with the Commission, petitioners clarified that they had "no position on the need for the proposed transmission project" but objected only to the placement of the line on the portion of Kreutzer Road where they own property. ComEd attached to its petition the prepared testimony of various witnesses. Ronald Dyslin, a senior real estate agent with ComEd, testified that his duties for ComEd include acquiring "real property for use as transmission rights-of-way and substation sites." He "assess[es] the type, size[,] and location of land required for any lines, substation, or facility sites." Dyslin explained why ComEd chose the south side of Kreutzer Road: "Q. Why is ComEd proposing this alignment? A. To the east of the railroad tracks and to the north of Kreutzer Road is an existing residential subdivision built since the approval of phases 1 and 2 of the Northwest Reliability Project, and a detention pond associated with that subdivision. The south side of Kreutzer Road is currently undeveloped. Q. Are you aware of plans to widen Kreutzer Road? A. We have reviewed an intergovernmental agreement among the communities in the area to the effect that Kreutzer Road will be widened to five lanes when the area south of

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Kreutzer develops. I would not call these 'plans' at this time, as there is no timetable for either the development or the road project in the stretch of Kreutzer that our proposed line would parallel. So, for the time being, we are proposing to acquire the necessary 50-foot right-of-way for our transmission line adjacent to the south edge of the current road right-ofway. If the plans for the road development become more certain before the line must be built (which is currently projected to be 2010 or 2011), we may be able to negotiate a solution with the communities and landowners to shift our alignment."1 (Emphasis added.) Asked whether ComEd will need to purchase easements from every owner of land along the proposed route, Dyslin replied, "No. In some cases, the landowners from whom we need easements will depend on the exact alignment of the line." ComEd also attached the prepared testimony of Neil Kaup, an engineer for ComEd. Kaup described the alternative routes ComEd considered before deciding on the Kreutzer Road route. Kaup referred to the following comparative table: Route I-90 and first leg north (common to all routes) Description I-90 from Gilberts to Sandwald. East side of Huntley Factory Shops to Freeman Road. Engineering Factors Use alley-arms to stay within I-90 [right of way]; need to address or span wetlands north of tollway. Length (mi.) 7.1 Estimated Cost ($M) $13.30

1

There is no evidence that an expansion of Kreutzer Road has ever taken place. -10-

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Kreutzer Road (Com Ed's proposed route)

Follow property lines north across Powers Road and Smith Road; use ComEd easement through Bernat industrial park; follow Kreutzer Road to existing transmission line. Follow Freeman Road to Galligan Road; follow Galligan Road to Dundee Road; continue north along property lines to existing transmission line.

Following west property line of Stade property involves additional poles compared to straight north; tree clearing north of Powers Road; possible [e]ffect on parking lot in Bernat industrial park; one house near Kreutzer Road on south side; need to consider timing of Kreutzer Road improvements. Least use of existing easements; affects the Koppie [Airport] and both runways of Reid [Airport]; need to address or span wetlands north of tollway; need to acquire extensive right-of-way from Kane Co. Forest Preserve; may need to cross back and forth to avoid existing homes in Freeman and Galligan; need to consider timing and location of Galligan Road improvements and relocation.

4.6

$8.75

Freeman/ Galligan

4.5

$9.19

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Main & Haligus

Follow property lines north across Powers Road and Smith Road; use ComEd easement through Bernat industrial park; use ComEd easement north along west side of Wing Pointe; along north side of Wing Pointe; then north to Main & Haligus.

Maximizes use of existing easements; following west property line of Stade property involves additional poles compared to straight north; tree clearing north of Powers Road; going around the south side of planned Huntley City Center would involve numerous angles and poles.

4.3

$8.61

Kaup described the advantages of the Kreutzer Road route: "The proposed route is least cost, although it is true that the proposed route and two alternative routes are similar in cost, so among alternatives, cost is not a major determinant of the route. The Tollway right-of-way is highly advantageous, allowing rapid construction, good access, very few angle points, a direct route to the substation, and little risk as to land acquisition. Off the Tollway, the proposed route has relatively few construction challenges. We do not expect problems with construction in wetlands, clearance problems, and will have minimal tree trimming. We parallel a railroad for a short stretch, so we will need to study the extent to which the proposed line will induce currents on the railroad, but we do not expect a problem. There is one house along the south side of Kreutzer Road that presents a conflict. Because that parcel is expected to be redeveloped in the coming years, that house would likely be sold and torn down as part of redevelopment." -12-

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Asked how the Kreutzer Road route compared to the alternatives, Kaup said: "Each of these routes is a feasible alternative from an engineering standpoint. Compared to the proposed route, the Freeman-Galligan route requires more land acquisition from more landowners, requires substantial acquisition from the Kane County Forest Preserve District, would impact not one, but both of the Reid [Airport] landing strips, and would also impact Koppie [Airport]. Compared to the proposed route, the Main & Haligus Route would involve numerous changes of direction along the north side of the Wing Pointe subdivision to skirt the edge of the planned Huntley City Center, which would involve several large, expensive poles to accommodate sharp angles." ComEd also included the testimony of Donnell Murphy of Arcadis, an environmental consulting firm that prepared a siting study for ComEd concerning the placement of the transmission line. Murphy described how the Kreutzer Road route compared to alternatives: "Specific to environmental considerations, the proposed final route better optimized the use of dominant linear features having compatible associated rights-of-way. It also provided for the placement of the proposed transmission line behind planned developments rather than along a major frontage, and eliminated the potential for impacts to occur to proposed developments along Freeman and Galligan Roads that are almost exclusively residential and progressing more rapidly than planned developments in other areas. Finally, it eliminated the potential for impacts to occur to the existing and newly acquired forest preserve lands along Freeman Road."

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ComEd noted that it was unable to reach agreements with some landowners for the purchase of property along the proposed line. ComEd therefore sought authorization under section 8--509 of the Act (220 ILCS 5/8--509 (West 2008)) to use "eminent domain to obtain the necessary right-of-way." The Commission staff endorsed the Kreutzer Road route. The Commission staff filed the testimony of Greg Rockrohr, a staff engineer with the Commission. Regarding the comparative costs of the route options, Rockrohr said: "ComEd indicated that of the three routes, the highest cost route, Freeman/Galligan, would cost less than 7% more than the lowest cost route, Main & Haligus. Since the error within each of ComEd's cost estimates is more than 7%, the estimated costs for ComEd's three final route alternatives can be considered equal for discussion purposes, so that cost was not a significant factor when choosing one route over another." The Village of Huntley (Huntley) also intervened in the action before the Commission. Huntley claimed that there are planned commercial and residential areas in Huntley on which the Kreutzer Road route would impinge. Huntley proposed a modified version of the Freeman-Galligan route. This modified Freeman-Galligan route would avoid Huntley but traverse property owned by Neumann Homes, a developer with plans to build a subdivision called The Conservancy on the land. There was evidence that The Conservancy was platted and partially built. There was also evidence that the modified Freeman-Galligan route would traverse land owned by the Kane County Forest Preserve District, specifically, the Freeman Kame-Meagher Forest Preserve. Petitioners presented the testimony of Donald Byrne. Byrne stated that petitioners own 265 acres on Kreutzer Road, with 40 acres on the north side of the road and the remainder on the south side. All but a small portion of the land is currently farmed. Petitioners have homes on both sides

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of Kreutzer Road. Byrne testified that portions of petitioners' farm have been in the Kreutzer family since 1868, and the rest since 1891, and that the farm has been certified as a Centennial Farm under the Illinois Department of Agriculture's Centennial Farm Program. Byrne testified to the detriment he believed the property would suffer if ComEd installed its line: "I realize that the actual acreage permanently taken out of farm production will be relatively small. But during the construction phase the farming operations will be

significantly interrupted. More importantly, however, the structures and lines will constitute a permanent intrusion upon the Farm. The Farm's character will be forever and significantly degraded by the presence of such a highly visible, man-made conglomeration of steel and wire. The structures and lines will contrast sharply with the natural farm landscape that exists, and has existed, for such a long time. The fact that the State has conferred the special, centennial farm designation on Kreutzer Farm just exacerbates the adverse impact of the project in such close proximity, when it is not necessary to do so." ComEd presented the rebuttal testimony of Rockrohr, who questioned the feasibility of the modified Freeman-Galligan route because it would traverse the property of a forest preserve district, against which, Rockrohr believed, eminent domain proceedings are not available. The Commission staff agreed with this position. Huntley presented the rebuttal testimony of Donald Robinson, a consultant in the area of utility line placement. Robinson testified that it is a "common practice to deviate from a tangent line in order to avoid sensitive areas and mitigate negative impacts." Robinson stated that, "[i]n [his] experience, it is commonplace for a utility to introduce minor variances when the actual design is engineered to handle the real-world conditions for placing its transmission facilities." Robinson

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believed that, "[b]y making a very few minor adjustments to the tangent alignment, the Modified Freeman-Galligan Route could avoid a major portion of the negative impact" on forest preserve lands. Specifically, Robinson believed that ComEd could situate the line just east of the tree line of the preserve without having to clear any trees on the preserve itself. Robinson noted that it is "important to bear in mind that even a 50' right of way does not require a 50' swath of complete vegetation clearance." ComEd presented the surrebuttal testimony of Dyslin, who testified: "Q. Huntley witness Robinson suggests that ComEd can construct the line east of the Powers Road trees ***. What comment do you have from a real estate perspective? A. The trees are on forest preserve property. ComEd understood that Huntley was proposing the line east of the trees. However, we cannot simply buy a 50-foot easement east of the trees without paying for the land containing the trees as well. Our 50-foot easement would abut at least a 40-foot wide strip, containing the trees, east of the centerline of Powers Road. So along the corridor, we would need to factor in the cost to obtain the entire 90-foot (at a minimum) width. Again, we'd have to pay whatever the forest preserve wanted to charge." On January 30, 2008, the proofs were closed and the administrative law judge (ALJ) marked the record "Heard and Taken." On July 11, 2008, the ALJ filed a proposed "order and certificate of public convenience and necessity" authorizing ComEd to install the transmission line along the proposed Kreutzer Road route. Appendix 1 to the proposed order adopted verbatim Exhibit B, the legal description attached to ComEd's petition. The ALJ set deadlines of August 8, 2008, for briefs on exceptions and August 22, 2008, for reply briefs on exceptions.

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On August 8, 2008, petitioners filed a "Motion to Take Administrative Notice Instanter." Petitioners represented that, on June 10, 2008, the Kane County Board passed a resolution designating petitioners' house on the south side of Kreutzer Road (the Kreutzer House) a "Kane County Historic Landmark." Section 16--94(a) of the Kane County Code (County Code) (Kane County Code

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